Union Bank Lays Foundation for Growth with Service Virtualization

Union Bank has used a service virtualization solution to improve application testing to replace legacy systems and launch new front end applications as it looks to grow into a top 10 bank.

San Francisco, Calif.-based Union Bank is striving to become a top 10 bank in the U.S. But reaching that goal requires a great deal of work from Union Bank’s IT staff to lay the technological foundation for growth. The IT staff needed to find ways to cut the time and costs it takes to lay that foundation with limited IT staff, Union Bank’s CTO Dana Edwards reveals, and has cut both using CA Technologies’ Service Virtualization Solution, called CA LISA, for application testing.

The bank ($97 billion in assets) has been acquiring other institutions, updating legacy systems and launching new front-end applications to compete with the top-tier banks, Edwards relates. “We’ve been replacing systems and processes for mortgages and deposit accounts. How do you do that successfully? We don’t have infinite resources for testing,” he says.

In order to make the testing of new applications and integrations easier for Union Bank’s 800 IT staff, Edwards introduced service virtualization, which he’d learned about while working previously at Bank of America before taking his position at Union Bank last year.

Using service virtualization with the help of CA Technologies the bank is able to simulate more scenarios during the testing phase of application development, and do so in less time. The solution has cut the time it takes to set up the development environment for each testing each application from 42 days down to 3 days, Edwards reports. And the system down time to refresh the test environment has been cut from 10 hours down to one, he adds.

The bank can now do many more tests - and test many more variations and combinations - per month. This has increased the quality of their testing process, which in turn has led to fewer issues after applications are deployed and the approval of the lines of business who use the applications every day, Edwards explains. At first about half of the IT staff bought into the virtualization service, Edwards recalls, with the other half skeptical of the new service. But with fewer issues coming back to IT after the launch of new applications, the skeptics eventually bought in.

“On the IT team we got engagement increased because there was less back and forth with the lines of business. It’s a better product in terms of being able to anticipate problems ahead of time,” Edwards says.

That capability helped the bank smoothly integrate a community bank, Santa Barbara Bank & Trust, that it acquired last year, Edwards adds. With service virtualization, the bank was able to run more tests of different combinations of accounts, systems and customers that would have to be integrated from Santa Barbara Bank & Trust.

The bank has also used service virtualization to develop new online and mobile banking applications that can match of those of the top banks, Edwards reports. The solution allows the bank to mimic changes that are taking place on the back end as it replaces legacy systems and simulate how those changes can affect these front end applications. In some cases the bank has been able to cut three and a half months from the development time of these applications, Edwards says.

And with these cuts in testing time, the bank has also cut 65-85% of the cost of its testing cycles. Edwards says that the bank has reinvested much of those savings back into the testing process to improve it further, and better enhance its ability to build the groundwork for the bank’s intended growth. “We’ve reinvested in finding ways to refresh data easier [in the testing process] and expand the types of testing that we can do,” Edwards relates. “In order to compete and get in to the top 10 we need to move quicker, more responsibly and with better quality. This [solution] in changing our identity to be more nimble to keep up with our business needs.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

We didn't discuss their core transformation at all, but, like a lot of the major banks who are doing core transformations, they're owned by a foreign bank. That's definitely a trend that I've noticed over the last year or so. And a lot of the technological innovation going on at Union seems to be heavily supported by The Bank of Tokyo-Mitsubishi, which owns them.

This bank has had a core systems modernization initiative in the works for a few works, would be interesting to know how this tool/solution is being used as part of that. The use of "service virtualization" to quickly roll out new offerings is interesting, too.